Category Archives for Buy

What You Need to Know About Buying A Foreclosure

Foreclosures can be home run investments, but, if you don’t do your due diligence, they can just as easily be the investment you regret.

First, consider the source.

Today there are tons of online resources for foreclosure lists, but they are not all made equal. You want to make sure that the list you’re using (especially if you’re paying for it) isn’t an old list. All foreclosures are public record, and if it’s public knowledge for some time, then you’ll be far down on the list of letters those owners will be receiving.

The courthouse records will always be the most accurate, but if you don’t want to spend your days thumbing through records, find an online resource who provides you with fresh lists.

You want to the be first one in the door, and the last one to leave.

Next, know what you’re looking for.

Sure, a property can look like a great deal from the initial number, but it could just as easily be a dud. Knowing your criteria means you won’t invest in a property that’s not a fit for you.

Not every property’s going to be a fit, so don’t be blinded by what looks like a screaming deal, when, in fact, it’s not a deal for you.

Finally, investigate.

When you find a property that matches your criteria on paper, we highly suggest you go take a look at the house, especially if you don’t have a lot of experience buying foreclosure properties.

Although you might not be able to get inside, you’ll want to get a feel for the area, the neighborhood, and you can get a good idea of the property’s condition just by checking out the exterior.

It also helps to know the history of the foreclosure – how long has it been sitting, how long were the occupants behind. This information will give you another glimpse into how the property may have been treated.

And always overestimate the repairs, especially with a foreclosure.

People who aren’t paying their mortgage, aren’t keeping up the property either.

Foreclosures can be great investments, as long as you walk into them with eyes wide open.

How to Spot A Real Deal

When it comes to real estate, how can you differentiate the deals from the REAL deals – you know, the one’s that graduate you from dabbler, to legitimate investor?

Here’s the thing, successful investors have one thing in common; they don’t buy everything that comes across their desk.

They shop for the deal that makes sense to them.

See, the secret is there’s no single definition of a real deal. A real deal is completely subjective.

There are two parts to determining if you’ve got a great deal in front of you.

First is, know your criteria.

You’ve got to define the standards of your great deal.

There are four questions you must ask yourself:

  1. Am I looking for lump sum or cash flow? This will greatly affect your purchase price and deal type.
  2. Why type of property do I want? Are you looking for commercial, single family, duplex? You’ve got to know.
  3. Where am I looking? Don’t say anywhere. Narrow your hunt down to specific areas; you’ll be more successful that way.
  4. What am I willing to pay? You need to know your price, and stick to it.

You need to write down the answers to those questions and have them on your desk at all times. Then, when something comes across your desk, you’ll know if it’s a deal for you.

It’s easy to stray from your standards and chase shiny deals around if you don’t have your criteria cemented in your mind.

Another secret we’ll let you in on, great investors always master one deal type at a time. Focus, master, repeat.

The second part to finding a great deal is know your terms.

Your terms could be an specific dollar amount you need to make, or a percentage, or a time frame.

For example, maybe you only do flips where you profit a minimum of $30,000, or maybe you need a 18% return on your money and to be out of the deal in 90 days.

When you know your terms, you can better evaluate your deal. If it doesn’t meet your terms, then it’s not a deal for you.

Solid criteria and terms are what separates the buyers from the shoppers, the dabblers from the pros.

Don’t be a dabbler, don’t gamble with real estate. Gamblers tend to lose. Know your parameters and stick within them.

Not only do they keep you focused and make it easy to spot a deal when you do see it, they set you up for success in a way that most people never achieve.